Continuing its “live” broadcasts of the audio portion of its hearings, the Supreme Court will be spending Monday morning on two major cases with potentially major impact on United States relations with foreign nations.  The governments of Hungary and Germany are seeking to block lawsuits against them in U.S. courts, for property seizures or transfers that occurred in those countries during the Holocaust or under Nazi rule in the 1930s.   The audios of the Justices’ two one-hour hearings are expected to be available at C-SPAN.org/supreme court

Background of both cases:

For much of history, a government of one country could not be sued in the courts of another country, unless it had consented to being sued.  That was a doctrine of absolute legal immunity. In more modern times, and especially in the United States, that doctrine has been supplanted by a qualified or restrictive immunity approach.  If a foreign government is acting in its official capacity, it usually can expect to have its immunity honored.  But once it moves into the kind of activity that a private entity could carry out, such as commercial activity, it may be sued – at least in U.S. courts — for violations of international law.

Congress wrote the restrictive theory into U.S. law in 1976, passing the Foreign Sovereign Immunities Act.  The law generally recognizes immunity for foreign governments, but it creates exceptions that open the way to lawsuits, and one of those exceptions is at issue in both of the new Supreme Court cases.  That is the “expropriation exception,” which refers to actions by a foreign government, in its own land, to seize private property.

Incidentally, the U.S. is alone in the world in recognizing that exception.  That’s because all other nations treat seizures of property, when done as an official act within a nation’s own borders and against its own citizens, as the action of a sovereign, thus putting it beyond challenge.  Those other nations thus do not consider such seizures to be violations of international law.

Even though the law has differed in the U.S., it was a common understanding for decades that, if a lawsuit aimed at such foreign property seizures might disrupt harmony among nations – what, in diplomacy, is known as “international comity” – or might interfere with diplomatic relations with such a country, then a U.S. court would not allow a lawsuit to go forward.

That understanding, that restraint, has now been abandoned by two federal appeals courts.  Both ruled that, if the property seizure violates some principle of international law – such as a human rights violation, based on genocide – the lawsuit can go ahead under the expropriation theory even though it puts in issue the official acts of a government on its own territory and against its own people.

One of those courts went further, and declared that, even without attempting to obtain relief in the other country, a U.S. a lawsuit based on a foreign property seizure could go ahead no matter what impact it may have on relations between nations.

The U.S. government disagrees on both points.  It contends that concerns over comity between nations do limit the right to sue for property seizures, and that – at a minimum – those who sue must first try to get a remedy in the country that carried out the seizures.  In addition, it takes the view that the 1976 law’s recognition of an expropriation exception only applies when a foreign government seizes private property from citizens of a different nation.

The facts of each case:

Hungary v. Simon

This appeal by Hungary’s government, scheduled to be heard Monday starting at 10 a.m., involves a lawsuit by 14 Jewish individuals who are survivors of the Holocaust in Hungary, the scene of one of the fiercest Nazi campaigns in Europe to eradicate the Jewish population.  All lived in Hungary when the seizures they challenge occurred, but later became citizens elsewhere; four of them are U.S. citizens.

They sued in a federal court in Washington, D.C., against both the Hungarian government and its state-owned railway, contending that the government there had collaborated with the Nazis to exterminate Hungarian Jews and seize their property, and that the railway had transported Jews to death camps and stripped them of their property when they arrived at those camps.  A potential monetary award in that case could be huge because the lawsuit, and two others similar to it, are seeking to pursue remedies as a worldwide class of Hungarian Holocaust survivors.

Ultimately, a federal appeals court ruled that their lawsuit could go forward in a U.S. court on the theory that the official acts in Hungary were a part of a campaign of genocide, to wipe out that nation’s Jewish population.

Germany v. Philipp

This appeal by the government of Germany and its national museum and research institution based in Berlin, with a hearing to begin as soon as the Hungary argument has finished, grows out of a lawsuit by two U.S. citizens and one Briton.  They claim to be descendants from German Jews who were art dealers in the 1930s.

At issue in their case is the ownership of about half of what is known as the Welfenschatz, or Guelph Treasure.  It is a collection of medieval religious relics, or reliquaries.  The Jewish art dealers were part of a consortium that bought the collection in 1929.  (The collection has been housed for more than 70 years in German public museums.)  After the Nazis took control of Germany in 1933, the consortium sold the collection to the German state of Prussia.

The three individuals who claim to be descendants of some of the art dealers filed their lawsuit in Washington, D.C., claiming that the sale had been carried out under Nazi duress, and thus was illegal.  They are seeking about $250 million in compensation or restitution of parts of the collection as heirs to ownership. Their lawsuit seeks to contest a finding by a modern German government commission that the sale of the relics was a voluntary transaction; that commission recommended against returning the property to descendants of the art dealers.

It was in this case that the same federal appeals court that decided the Hungary case ruled not only that the case could go ahead under the expropriation exception to foreign government immunity, but that the doctrine of international comity should not stand in the way of the lawsuit, whatever the diplomatic complications that might result.

The questions before the Court:  The Justices granted review of both governments’ appeals, and will hear them separately.  At issue in both cases is whether U.S. courts have the authority to hear a challenge to a foreign government’s official seizure within its own borders of the property of its own citizens.  In addition, at issue in the German case is whether U.S. courts should not allow such a case to go forward if it would disrupt international comity, especially if that government provides a mechanism for a possible remedy for such seizures.

Significance:  The issue that is common to the two cases – the claimed right to sue in U.S. courts against a foreign government for official acts in its own country against its own people – has potentially wide foreign affairs implications, partly because no other nation recognizes such a right.  If the right is found to exist, it seems likely to encourage other nations to retaliate by allowing similar lawsuits in their countries against the U.S. government.

The U.S. government is expressing deep concern in its papers in the two cases, arguing that the lower court rulings at stake threaten a serious disruption of diplomatic relations, as well as threatening the stability of international law norms on property seizures.

Huge sums of money are also potentially at stake, with the Hungarian government contending that the sums in its case might ultimately amount to a sizeable share of that government’s resources, while the German government notes that the three individuals that are suing it are seeking nearly a quarter-billion dollars.

One factor that may work in favor of the two governments is that the current majority of the Supreme Court has shown a rising skepticism about allowing U.S. courts to reach across the seas to other nations, to hold them accountable under unique U.S. laws.

At the same time, the case clearly does have major implications for the use of large money lawsuits to rectify human rights that have occurred around the globe.

On Tuesday, the Court will return to the review of the federal law banning robocalls, this time with Facebook itself as the target of the ban.